yen depreciation is supporting the performance of Japanese listed companies. According to statistics on 34 major Japanese companies that released their financial reports from April to June 2022 as of the end of July, the effect of the depreciation of the yen pushing up profits exceeds 240 billion yen. Reached 16% of the net profit of 34 companies. It will help resolve negative impacts such as rising raw material prices, and some companies have successively raised their performance forecasts for the 2022 fiscal year (as of March 2023).
Nikkei surveyed a total of 48 companies including the Nikkei average index component , which released its financial report as of July 29, and Nikkei, which has a huge profit scale. Among them, there are 34 companies that record the amount and exchange gains and losses of in the financial report and the profit and loss statement of . The yen depreciated against the background of the US interest rate gap caused by the US rate hike of in the United States. The average mid-term exchange rate from April to June 2022 was nearly 130 yen, depreciating by 20 yen from the same period last year.
As the yen depreciates, the net income brought by exports and the income calculated in yen by overseas subsidiaries will expand, and "companies such as automobiles and machinery will benefit significantly," said Akiyoshi Yai Mori of Sumitomo Mitsui DS Asset Management. On the other hand, the prices of imported products will rise, which will become a factor that squeezes profits for domestic companies. The total net profit of 34 companies from April to June 2022 increased by 11% over the same period last year, increasing to 1.5407 trillion yen. Without the effect of the depreciation of the yen to push up profits, there is a high possibility that profits will decline.
Among the 34 companies, the depreciation of the yen has brought positive effects to 28 companies (282.5 billion yen). The most obvious effect of pushing up profits is Murata Productions, which pushed up operating profit by 30 billion yen, while the exchange income brought by re-evaluation of foreign currency-denominated assets reached 12 billion yen. The domestic production ratio is relatively high, and overseas operating income is relatively high, and profits are prone to improve due to the depreciation of the yen. The consolidated net profit from April to June 2022 was affected by the rise in raw material prices, which decreased by 3% compared with the same period last year. Without the depreciation of the yen, the profit decline would be even greater.
In the electronics industry with a large overseas operating income, many companies have achieved profit growth due to the depreciation of the yen. Taking Japan Electric as an example, due to the positive effect of the depreciation of the yen being higher than the rising raw material prices and other negative factors, net profit from April to June 2022 hit a record high. DongDengdong Denki 's net profit from April to June 2022 increased by 27%, to 26.4 billion yen. The effect of the depreciation of the yen pushing up profits reached 14.5 billion yen based on operating profit.
In addition, it also supports the profits of cars facing headwinds such as supply constraints. From the perspective of Nissan, based on operating profit, the effect of the depreciation of the yen pushing up profits reached 25.7 billion yen. This offsets the decline in profits caused by rising prices of raw materials such as steel and resins (50.7 billion yen). Judging from Mitsubishi Motors, which hit a new net profit from April to June 2022, based on operating profit, the effect of the exchange rate pushing up profits reached 17.5 billion yen, and non-operating income also received 17.2 billion yen exchange income.
Mitsubishi Motors' factory in Okayama Prefecture
In view of the current exchange rate market, some companies have successively raised their annual performance forecasts. As Mitsubishi Motors released its financial report from April to June, it adjusted its expected exchange rate to 1 US dollar against 125 yen, a 3 yen lower than the beginning of the period. The depreciation of the yen will strengthen the factors driving up profits, raising the full-year performance forecast.
Aidwan adjusted his net profit expectations for fiscal 2022 to 130 billion yen with a year-on-year increase of 249% html, up 17.5 billion yen from previous expectations. The depreciation of the yen became a factor driving up profits, further increasing previous expectations of profits reaching new highs. In the international maritime sector where US dollar settlement is mainstream, coupled with the strong market of container ship , the three major giants, Japan Mail Ship, merchant ship Mitsui and Kawasaki Steamboat, have raised their net profits.
On the other hand, from the perspective of domestic demand enterprises, the depreciation of the yen has led to the deterioration of import accounting, which has become a headwind. Taking Tokyo Gas as an example, the depreciation of the yen from April to June 2022 caused a decline in profits to fall by more than 11 billion yen. NECh Affected by the depreciation of the yen, the procurement fees of parts expanded, resulting in a decline in profits of 500 million yen.
, Mago Iiden, in response to the financial reports from Japanese companies from April to June, said that "the profits are improving due to the depreciation of the yen." However, the exchange rate fluctuated violently, with the yen rising to 130 yen on the 2nd day, reaching its highest level in two months. Based on future exchange rate trends, the effect of pushing up profits may also weaken.
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